1. Field of the Invention
The present invention generally relates to a method and apparatus for depositing ordinary checks from home or office and the checks used for such deposit and, more particularly, to a method and apparatus which securely converts an ordinary check to a digital form and allows secure electronic data transmission from home or office computer to the payee""s bank in order to deposit the check.
2. Background Description
With the development of the World Wide Web (WWW) came the development of home banking, which previously existed on a very small scale. But there are still lots of basic banking operations which so far require to go to a branch or to an Automated Teller machine (ATM). The most important such operation is depositing a check, and more precisely a paper check as they have existed since much before the electronic age. While most of the rest of the world moves away from checks (although at a rather slow pace, about 4% per year in England, for instance), the use of checks is still growing in the U.S.A. Allowing deposit from home would both be more practical for some customers (which helps in particular the banks for their Customer Relationship management), and less costly for the banks. In particular, depositing a check from the payee""s location (from home or from the office, or other location remote from the bank or an ATM), assuming it would be reasonably automated, would represent a considerable value for a variety of small, medium, and large businesses. In fact, even in countries where overall check traffic has been significantly decreased, there are businesses which still have to handle an increasing number of checks, which is very costly for them because of the work involved, and also to some extent, because of the errors involved.
When we speak about deposit from home or office, we assume that from a paper check, indeed a little piece of the physical worldxe2x80x94we also say an analog entity xe2x80x94we first create a digital entity (we also speak about the digital form of the check). A digital entity is basically a set of symbols with some groups of symbols carrying tags. The tags refer to which part of the real world the group of symbols refers to and/or describe the role of the group of symbols they are attached to, and/or describe the way this group relates to other groups of symbols. Such tags can indeed be explicit, or be implicitly contained in the way the overall set of symbols is formatted.
The digital form of a check does not fully replace the check, as long as the check is not destroyed in the process. We will assume that destroying the paper checks would not be acceptable, and that paper forms of checks may be used in some lawsuit settlements and the like. Thus, recourse to the paper form will only play a role extremely rarely. Consequently, for all practical purposes, we will in fact consider that the paper checks have been transformed to digital entities. Once in digital form, a check becomes quite close to an electronic check such as the ones that have been considered by the Financial Services Technology Consortium (FSTC) (see http://www.fstc.org). Thus, most of the present disclosure will deal with the problem of generating digital entities with security and ease of use for all parties at hand (the payer, the payee, and their banks, and further parties as needed by the protocols). Once in digital form, protocols previously developed for electronic checks, or other forms of electronic payment systems, can be used in our context. On the other hand, what we will describe here to complete the deposit mechanism and its administration could be used for other secure transformations of documents into corresponding digital forms.
A few numbers will illustrate the size of check handling. In the U.S. in 1993, checks represented 80% of the noncash transaction volume for only 13% of the transaction value, with an average value per transaction of $1,150. While the use of checks has been declining in some countries, it is still increasing in some. The handling cost is huge for banks, and even more when bad checks are presented or frauds occur, such as multiple deposit attempts. Beside reducing the processing cost, allowing checks to be transformed to digital entities before being deposited would also help the overall transition to more forms of electronic payment systems.
For a general reference on electronic payment, see for instance Electronic Payment Systems by Donald O""Mahony, Michael Pierce, and Hitesh Tewari, Artech House, Boston, 1997.
As we mentioned before, to deposit a check from home or office, we assume the checks will be converted from their analog form to some digital form, in particular to allow data to flow using electronic means of communication. The problem is that digital form allows easy data modification, a door open to easy counterfeiting. Furthermore, the very ease of data flow and copy in electronic form can also facilitate other forms of wrong doing. The main problems to be solved can be formulated as follows:
1. Secure transformation of ordinary checks into a digital form and secure transmission to a bank. Here, the word secure both refers to the difficulty of counterfeiting and to the protection against machine failure.
2. Multiple deposit of any check should be very hard.
The reading of the paper check, involved in the transformation of the check into a digital form, should measure enough details of the check to assure that is it is very hard to make illegitimate checks that do pass the authenticity test based on the reading.
As usual in the security business, very hard essentially means so hard that the cost of defeating the system would most probably be much higher than the benefit.
It is therefore an object of the present invention to provide an apparatus and method that allow to deposit ordinary checks from home or office while solving all problems we have mentioned above.
According to the invention, a special scanner is used to scan an endorsed check for deposit. Some encrypted indicia may be printed on the check, if desired, in addition to other security features discussed below. Scanning the endorsed check with the scanner generates a digitized version of the check. The scanner virtually partitions the digitized version of the check into a plurality of regions. These regions may be stripes or zones. Each region is successively examined to extract from the digitized version of the check information from that region. The information extracted from a region is encrypted and transmitted to a bank. Upon acknowledgment from the bank, at least some of the regions of the plurality of regions are voided. The processing by the scanner continues until all regions have been processed. This progressive voiding scheme is an important security feature of the invention.